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Apple Pay to link to loyalty cards and roll out in UK in July

Apple Pay will begin linking to some store loyalty cards and will be introduced in the UK as the company attempts to overcome hiccups with its electronic-payments system.

PHOTO: REUTERS

[SAN FRANCISCO] Apple Pay will begin linking to some store loyalty cards and will be introduced in the UK as the company attempts to overcome hiccups with its electronic-payments system.

Pinterest and the Discover card also will work with Apple Pay, Jennifer Bailey, the head of the system, said Monday at Apple Inc.'s annual software developer conference in San Francisco. Next month, Apple will roll out the system at 250,000 locations in the UK, including public transportation.

Chief Executive Officer Tim Cook is relying on new services such as Apple Pay to expand the company's digital footprint and encourage people to stay with its products. Apple is fighting against Google Inc, EBay Inc's PayPal and others in a market that is likely to process US$67 billion worth of sales this year and may increase to US$142 billion by 2019, according to Forrester Research.

One feature that has been missing from Apple Pay is support for merchants' customer-loyalty programs.

"Apple Pay is still optional and not yet essential for merchants," said Sucharita Mulpuru, an analyst at Forrester Research Inc. "Adding loyalty rewards is a first step in building a more integrated mobile wallet." In a survey of about 3,000 people, almost half faced difficulties using Apple Pay, according to a study released in March by Phoenix Marketing International.

Apple is adding store debit cards to the system, which will be available in more than 1 million locations starting next month, Mr Bailey said. Searches in Apple's updated Map application will indicate if merchants support Apple Pay.

Apple Pay, which essentially transforms an iPhone 6 and 6 Plus into a digital wallet, was touted as being an easy way for consumers and retailers to enter a new world of consumption. The biggest US banks and credit-card networks are using Apple Pay to help accelerate adoption of mobile payments while maintaining control of their transactions.

The Cupertino, California-based company said Monday that its Passbook app - renamed Wallet - will accept loyalty cards from merchants including Dunkin' Donuts, Walgreens and Panera Bread, accruing rewards that can be redeemed through Apple Pay.

Square Inc, the electronic-payments company, said it would release a reader in the fall that will accept Apple Pay and other so-called contactless systems. Square is offering one reader free per merchant for a limited time.

Android Pay Google, which already had a struggling mobile wallet, unveiled Android Pay at its developer conference late last month to challenge Apple's service. Android Pay will be available later this year and will link up with loyalty programmes.

Samsung Electronics Co has previewed its Samsung Pay mobile-transaction system, which will be available in the third quarter in the US and South Korea.

Apple traded at the equivalent of US$128 as of 9 a.m. in Frankfurt. The stock closed at US$127.80 in US trading Monday.

In the US, Apple Pay, which uses short-range wireless signals known as near-field communications, only works at stores that have upgraded their checkout-line payment systems. Apple said in March that the service was supported by 2,500 banks in the US and about 700,000 locations.